Global stock markets faced significant declines on Monday, pressured by a dual impact of renewed Middle East geopolitical tensions and a large-scale sell-off in technology shares, while international oil prices surged substantially, with Brent crude approaching the $97 per barrel mark.
During Monday's Asian trading session, Brent crude futures rose over 4%, touching $97.69 per barrel, while U.S. West Texas Intermediate crude also gained approximately 4.5% to $94.49. This sharp price increase stems from direct military confrontation between Israel and Iran. Reports indicate Israel conducted airstrikes on the Mahshahr petrochemical facility in southwestern Iran early Monday, causing partial damage to the complex. This followed several waves of missile launches by Iran toward Israel hours earlier, marking the first direct exchange of fire between the two sides since a ceasefire agreement took effect in April. The Israeli military stated it struck military targets in western and central Iran, with Iranian state media reporting explosions heard in the capital Tehran and several other cities.
The conflict has heightened market concerns over potential supply disruptions in the critical global oil transit chokepoint, the Strait of Hormuz, which handles about one-fifth of the world's crude shipments. Although the U.S. President publicly called for an immediate halt to attacks from both sides and indicated efforts to advance a memorandum of understanding with Iran to reopen the Strait, negotiations have stalled due to factors including the Iranian nuclear issue. Analysts note that a lasting peace agreement is becoming increasingly difficult to achieve.
Amid the oil price surge, global equities came under pressure from a severe sell-off in the technology sector. Strong U.S. non-farm payrolls data on Friday fueled market expectations for further Federal Reserve interest rate hikes, combined with profit-taking triggered by overvalued chip stocks, leading to a 4.2% plunge in the Nasdaq index. On Monday, the selling wave spread to Asia-Pacific markets. South Korea's KOSPI index plummeted over 8% intraday, triggering a circuit breaker mechanism, while Japan's Nikkei 225 index fell nearly 4%. Major European indices also opened lower across the board, with London's FTSE 100, Paris's CAC 40, and Frankfurt's DAX indices all recording losses.
Analysts suggest markets are facing a triple test from geopolitical risks, tightening monetary policy expectations, and the bursting of technology stock valuation bubbles, with volatility likely to intensify in the near term. Although the Organization of the Petroleum Exporting Countries and its allies have agreed to another production increase in July, analysis indicates this decision holds more symbolic than practical significance, as most member nations are constrained by capacity bottlenecks and unable to significantly boost supply.
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